Binance Futures Listings Trigger Massive Sell-Off for AI Tokens

AI-focused cryptocurrencies have faced a brutal downturn following their introduction to Binance’s perpetual futures market, reigniting concerns over the influence of derivatives trading on smaller digital assets.

Ai16z, which hit a high of $2.42 at the beginning of January, has since nosedived by over 84%, now sitting at just $0.38. Venice Token (VVV) has suffered a similar fate, plunging from $18 in late January to around $5.82, marking a 67% decline.

The situation escalated after Binance launched perpetual futures for ai16z shortly before its affiliated DAO rebranded as ElizaOS. Not long after, the exchange introduced similar futures for VVV, the token powering the AskVenice AI ecosystem.

Some market analysts argue that these listings have had devastating effects. Ilya Paveliev, co-founder of Arete Capital, believes perpetual futures have turned into a tool for aggressive short-selling rather than fostering organic price movement. He claims that traders exploit these derivatives to push prices lower while offloading their spot holdings.

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Unlike traditional spot trading, perpetual futures allow traders to wield significant influence over market trends with relatively little capital. Paveliev suggests that this creates an environment where large investors can force prices down, while market makers—who typically help stabilize assets—withdraw support once a listing goes live.

Additionally, he criticizes Binance’s approach, arguing that the platform prioritizes hype-driven narratives, such as AI and meme coins, instead of fundamentals. By listing perpetual futures for tokens with limited liquidity, the exchange allegedly amplifies volatility, exposing retail investors to heightened risks.

Source

Kosta Gushterov